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tv   Bloomberg Daybreak Asia  Bloomberg  July 18, 2018 7:00pm-9:00pm EDT

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f dolls ara year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. >> it is 9:00 a.m. on wednesday. i am haidi stroud-watts. stocks set for modest gains. the dollar is holding on to with the gains. jay powell repeating his upbeat message on capitol hill. he says a trade war would be a threat, but does not see an eminence recession. --from bloomberg school global headquarters, i am ramy inocencio in new york. google is slapped with a record fine in europe, it is asked to change the way it promotes services on its android devices. morgan stanley is the latest to be a street. most u.s. banks surpassed
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estimates in the second quarter. haidi, good morning again to you and to our viewers in the asia-pacific and around the world. taking stock of what happened in the u.s. today. it was mostly positive, to the upside here. we did get support out of the bank earnings, morgan stanley the latest to beat the street. jay powell pretty positive, but we expected that, because of his testimony on capitol hill. all in all, that is overweighting tensions on global trade and tariffs we have been talking about. haidi: in the absence of a negative headlines or negative tweets, it seems it is a natural course trajectory from the markets. it is just a little higher.
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it does feel we are waiting for the other shoe to drop. we are seeingwhy fairly modest gains going into the asia open. ramy: does the other shoe have to drop? for now we will keep that shoe on. let's take a look at the board and see how the u.s. closed. 0.2% for the00 up s&p 500. highest since february. the dow seeing a five day streak of gains, the best in the past two months. the nasdaq, we will call that flat. let's flip up the board and take a look at commodities. up 0.4%. that was really helped because of new york crude, brent crude, as well as gas. we sawange thing, haidi, a surprise it jump in inventories last week. this was according to the eia. we would have expected crude to it lent support
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to oil and brent and as you see, pushing up the bloomberg commodity index. haidi: there is still the psychological tug-of-war when it comes to trying to assess of supply and demand situation with opec, how they plan to distribute this dump up with supplied. let's look at the open in asia. modest gains across the region. not too bad when it comes to new zealand, where trading is underway. about 0.1%. sydney futures looking to build modestly on yesterday's gain just shy of 1%. broadly positive future when it comes to the opens in seoul and tokyo. also watching tokyo -- currencies. the biggest gainers in the dollar overnight, the aussie and kiwi dollar. the aussie took a bit of a walk above 74 u.s. cents.
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.e kiwi dollar trading at 6794. we did see an appetite for risk commodities. ramy: let's do a little bit of a deeper dive on the u.s. market close. thanks with positive earnings once again helping lead stocks higher. not sureooking at oil, where it was going. it decided to shoot higher at the end of the day. american express after-hours going the other way. has more. we ended a tad to the upside. >> did not make it at the close. a mixed close. the dollar head steady on positive comments from powell. we talked about oil heading higher from a sharp drop. what is significant is gold heading lower, and a lot lower, is what strategists warn.
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we will get to that. let's look at after hours. theican express falling as forecast failed to match the rosiest expectations, despite quarterly profit beating it. it was the outlook investors were harsh with. ibm sales cloud business doing well. investors are getting applause. revenue gained 2%. missed estimates, however. it will be interesting to see how thursday trade handles that. let's take a look at banks and a billionaire. let's look at the board of stock movers. morgan stanley, a standoff. the fifth bank about to report -- buffett, a big buyback. stocks zoomed, biggest rally. let's go to one more panel. transport doing well. stocks doing well.
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roku getting a bit of the flu from netflix. service,treaming audio they report earnings on august 8. haidi: getting back to the main story of morgan stanley, that rarity. tough the market is, analysts got a lot of kudos for this report. up some 2.5% on the day. theywas the standout here, performed strongly across all sectors. dealmaking, one of their biggest gainers. if you look at what is going on itterms of the key topics, included the securities business and the bank's strong yield pipelines getting a lot of positive attention. the
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investment banking revenue rises. over here green is the color for morgan stanley, in more ways than one. if only all results could be this easy, analysts said. six banks have been doing well. every bank except bank of america has posted high investment fees, with morgan stanley's high climb leading the pack. haidi: that was a good news of when it comes the financials. with all there action. tech resuming that slide. against al appeal record $5 billion antitrust fine imposed by the european union, which ordered it to change the way it puts search and web apps on android devices. >> google has used android is a vehicle to cement its dominance as a search engine. these practices have denied rivals a chance to innovate and to compete on the merits.
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they have denied european consumers the benefit of effective competition in a very important mobile world. haidi: let's get our senior analyst with more details. we see much of a market or analyst reaction? >> it was pretty much anticipated in a lot of ways. at the fine versus the cash balances, the market is treating it as runoff. that is not the big concern. the big concern is, after this event, what does it mean for the android ecosystem in general, and what changes they could spur, especially from a traffic acquisition costs perspective. bring money to apple to make google a default search system, but a higher traffic cost. haidi: what is expected to be
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the flow on effect to google's business? whenever you are looking at search driven on a particular advice, you are seeing android market share significantly higher than apple. on apple they have to pay essentially apple for making them the default search engine. what you will see over here, some combination of cost acquisition might happen on android. on the sony call next week, investors will focus on, what is the severity of that? is there margin impact? regardless of margin impact, what you will see is google's investment in their own hardware, their own pixel devices, are ramping up, and they will probably double down on the back of this. curious, with this change in google search, how might it impact its deals with its partners?
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you have to look at how google traffic has been changing over the last couple years. one big thing we are seeing is the app traffic.,ing on the youtube app itself is picking up a lot. ist the app traffic does provides an offset if you lose some control over the operating system in the deal. a big impact on revenue. as far as partnerships are concerned, you may see avenues for cost to google. impact on margin, but not revenue, because of the way google traffic is moving. ramy: interesting stuff. our senior analyst coming to us from san francisco, thank you. let's get first word news with jenna dagenhart. >> thank you.
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president trump putting more pressure on allies in europe, threatening to impose tariffs on cars imported from the e.u. they meet for talks in washington next week. he said imported vehicles will be top of the agenda. of the job losses on both sides of the atlantic if the administration carries out its threats. pres. trump: we said if we do not negotiate something fair, then we have tremendous retribution, which we do not want to use, but we have tremendous powers. we have to. including cars. cars is a big one. you know what we are talking about with respect to cars and tariffs and cars. >> president trump's top economic advisor blaming china for delaying talks and escalating the trade war. he says president xi is holding things up. xi does notesident
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want to make a deal and has no intention of following through. deal ismay repeated no better than a bad deal when it comes to brexit. they question of the implications of a no deal scenario. she said there is no simple answer to the irish border. meanwhile, boris johnson told parliament he quit because of ering" over brexit. and some people cannot stop making money. in a week where he gave away $3 billion to charity, warren buffett earned $4 billion. $81ping his fortune to billion. it dropped below $80 billion on tuesday, but we all know it bounced back. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
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i am jenna dagenhart. this is bloomberg. haidi? ahead, thel potential impact of the trade war on the u.s. midterm. chair joins ust later. ramy: we talk market strategies. this is bloomberg. ♪
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haidi: this is daybreak asia. i am haidi stroud-watts in sydney. ramy: i am ramy in new york. let's get to central banks. jay powell says there is no indication a recession is imminent. he did acknowledge an escalating trade war is a risk to his rosy outlook. and policy editor kathleen hays is here.
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he decided he was not the person to criticize that. kathleen: i think first of all the fed chair said many times, at the fed we stay in our lane. he was asked so many questions about trade. -- democrats wanted him to talk about how terrible trade was. he prefaced it by saying, if toiffs are used as a tool force other countries to open up their markets, this could be good for the u.s. economy, and in fact, workers around the world. isis positive there, but quick to add there are definite risks and the risks are growing. let's hear what he said earlier to the house financial committee. >> you are just beginning to see the retaliatory tariffs come in place. they are only just beginning. hear a few reports here and there about this company and that company. agriculture is seriously affected, but it is just
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beginning. you want to be careful to walk on this path, because it may not be so easy to get off it. kathleen: sophie: let's go -- kathleen: let's go to the release of the fed's beige book. this is a survey of anecdotal evidence from each of the 12 district banks, a snapshot of the economy before the next fed meeting. it found trade concerns are spreading, growing and businesses in every district. although economic growth, looking pretty good. there is an inability to find workers. when asked jay powell said the u.s. economy was shy on .mployment and inflation rates are balanced. let's hear what he said about policy this year. i may be slightly more worried about lower inflation still, but for a long time,
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inflation was below target. we have just about reached a symmetric 2% objective, so it is very close. from this point forward, the risks are roughly balanced. kathleen: next meeting is of course on august 1. no rate hikes expected there, those it should be in september. ramy: kathleen hays, thank you so much. let's do a quick reminder of the day on wall street. where stocks ended slightly higher, led by the banks, thanks to morgan stanley. let's discuss that and more with whittier trust's cio. terms ofme strength in earnings, the markets slightly higher. as we heard kathleen talking about, trade tensions with fear damage, but no damage yet. how do you put all this together? >> look, we still think the
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whole discussion on tariffs and giantss just a big, posturing and negotiating tactic. if you had to break it down, this is what the anatomy of these negotiations would look like. unfair we had arrangements with our trading counterparts in some instances. we felt we were the subject of technology transfer, the theft of intellectual property. we chase to the status quo. we realized we needed change. and we needed to make the threat somewhat credible to make it effective, so we had rounds one and two. economyealized the u.s. is quite strong, so we decided to raise the to get even more concessions. so that is where things stand right now. we do not think this cascades into a full-blown trade war. we are mindful of the risks. this is a dangerous game where
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this tit-for-tat sequence can become a major trade war, but we do not see this happening for one major reason -- nobody wins and a global trade war. therefore, cooler heads will prevail. ramy: the fear though, is growing. we have the fed beige book saying the concern is there for manufacturers across the board. --are not seeing it yet granted we are in the doldrums of summer in the market, but where do you go, how do you navigate this to august 30, when those $200 billion of tariffs on china are set to take effect? sandip: it is a tug-of-war between the really positive dynamic of growth and this headwind, which is anti-growth. global trade wars can be damaging to exports, prices, tantamount to a tax hike, which can offset the benefits of a tax
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cut. it is interesting however to us that in the earnings that have been reported so far, where companies have given forward guidance, they talk about the ill effects of a stronger dollar more than a talk about the damage from a trade war. refer tohe beige book, it as a potential risk, it is just too early in the game we feel. as i mentioned, here is this stake that is hoping to modify behavior. unfair arrangements, whether related to trade or not, are just not sustainable. in many ways we are capitalizing the movement which will eventually eliminates imbalances, inequities and artificial barriers in trade. that in the long run is good news for everyone. haidi: i want to take a look at what the global economic growth picture and market conditions
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look like if you take a side the unknown of trade wars. i want to look at this chart in our gtv live. it has been largely smooth and gradual as jay powell would have you believe in his testimony this week, but if you take a look at liquidity conditions, this is a flashing warning sign markets are telling the fed after this environment of extraordinary borrowing so inherent in market conditions, it cannot now handle the withdrawal of the liquidity and not have that borrowing. is that a thesis that makes sense to you, as dire as it is? sandip: no. let's take a closer look at where the fed is in its tightening cycle. remember the other central banks are neutral or still using. the fed funds rate is just shy of 2%. inflation is gradually inching up.
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core measures of inflation are somewhere between 2% and 2.5%. the headline is more like 2.5% to 3%. when you do the quick arithmetic, the real fund rate is negative. it is negative anywhere from 50 to 100 basis points. that is accommodative, not restrictive. global short rates are 2%. global inflation is at 3%. real short-term rates around the globe are negative. in the u.s. you have typically had a recession. -- recession when the real fund rate is close to 300 basis points. yes, we are beginning to normalize interest rates here, but we are so far behind the to keepll for so long the life support of zero interest rates in place, that really there is nothing to be alarmed about, we think, at this
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stage of the u.s. tightening cycle. what is your expectations for behavior in the u.s. dollar going forward? sandip: the rise in the u.s. dollar is of concern to u.s. multinationals in the that their corporate profits could be affected. it is a red flag to the emerging markets. a lot of the emerging-market debt is dollar-denominated. rising dollar is obviously negative from that perspective, but keep in mind the strength in the dollar is driven by divergent monetary policies. at some point in the next year or two the ecb will begin to start raising rates. at that time they will come back on the same page with the u.s. policies will not be so divert and. divergent.n --
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that could take pressure off the u.s. dollar -- dollar. haidi: there is plenty more to come on daybreak asia. this is bloomberg. ♪ this is bloomberg. ♪
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haidi: a quick check of the latest business flash headlines. boeing has announced another megadeal. a $12.7 billion order. morearrier is taking airplanes, the biggest operator. says it will allow them to expand their network at home. the deal includes training and technical assistance in vietnam. ramy: new york city has approved a new law forcing airbnb to share the names and addresses of offering accommodation.
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it builds on existing rules banning short-term rentals. violateays it willl host privacy. this is bloomberg. ♪ s is bloomberg. ♪
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haidi: it is 9:30 a.m. in sydney. 30 minutes away from the first major market open. modest gains as asia wakes up for trading. trading in wall street dominated by financials, morgan stanley earnings blowing it out of the water. haidi lun here in sydney. ramy: it is 7:30 p.m. in new york. markets closed up 0.2%. the highest seen since february. we did get a jump, thanks to earnings coming out of the financials.
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more on that and a bit. i am remy innocence you in new york. ramy innocencio in new york. >> google says it will appeal a record $5 billion antitrust fine imposed by the european union for the way it puts search and web browser apps onto android mobile devices. it has been told to change the way it operates, what brussels called illegal practices, that pushes services in front of users. >> google has used android as a vehicle to cement its dominance as a search engine. these practices have denied rivals to -- a chance to innovate and compete on their merits. it has denied european consumers the benefits of effective competition. >> jay powell is again speaking
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out against trade barriers. he says an ultimate outcome of lowered tariffs would be good for the economy. powell said he opposed protectionism and would not want to see trade uncertainty offset momentum, but he remained upbeat about the u.s. economy, saying there is no indication a recession as a minute. tesla ceo elon musk apologizing to a british diver who helped rescue a football team trapped in the thailand cave. guy."called him a "pedo he said he spoke in anger and did not justify that response. he said the fault is mine and mine alone. the team, they have left home. the boys had been kept in quarantine of doctors check to them for illness or psychological damage. rising water trap to them in the thailand cave june 23.
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their boys and 25-year-old coach have been declared generally safe -- healthy. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jenna dagenhart. this is bloomberg. haidi: thank you so much for that. details coming through from earnings out of woodside petroleum. the second quarter revenue, $1.8 -- $1.08 billion. that is one to watch of the sydney open. we are counting down to some of the major market opens in asia-pacific. let's get it over to sophie kamaruddin. this trade war has gone nuclear with of the u.s. looking into uranium imports. what are you watching in my part
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of the world? part of theour world we are watching for reaction in aussie, uranium miners. they are the second largest importer to the u.s. of nuclear power plant fuel. this after canada, russia, kazakhstan. american companies provide less than 5% of global demand. keep an eye on paladin instant -- in sydney. 1980 nine, imports did not threaten national security. this time it may be different, and that could be a blow to australia, which is able to escape the steel tariffs. we are also keeping an eye on aluminum tariffs. alumina mining stocks, as you can see on this chart, they did languish this year. index of alumina miners trading at a one year low.
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this one hardest hit, given it was directly targeted by the u.s. speaking to the tariffs aim, we will see if there is any more pushback from japan. perhaps we will see if there are any implications on japan when it does report a trade balance in less than half an hour. that is expected to swell to a surplus in june. a 5.3% rise in imports. ramy: trade war or not, the treasury market looking sleepy, not moving much today. the calm before the storm? about as fun as watching paint dry. it has moved less than a basis points this month, putting it on course for the smallest monthly ranges since 1973. you can see the move or lack thereof using the gtv library. volatility at multi-decade lows. this the lack of reaction,
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is the market wondering if something dramatic may be looming on the horizon, given the buildup in treasury shorts. key development happening just below the surface, haidi. haidi: thank you so much for that, sophie kamaruddin, on the markets. there is the feeling of this fragility. forecast orut its the year, adding to concerns among commodity investors metal prices languish amid trade tensions. mood how much of alcoa's is down to these tariffs? dave: good morning. just as sophie was referencing, alcoa revised down a 2018 profit forecast overnight. it had previously sin -- --viously seen a figure of it put the blame squarely on those terrorists.
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they export to the u.s. -- it put the blame squarely on those tariffs. they export to the u.s. look, even some concerns industrial customers in the u.s., while demand is pretty strong now, if they happen to continue to factor in the higher those tariffs, they may want to move outside the u.s. also $50 million in costs itself a from tariffs because the import for their own operations. we are seeing the impact, definitely. the impact for today's earnings, other aluminum
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suppliers, i am thinking of rio tinto and other chinese producers as well? not entirely clear. i think alcoa has been a clear-cut case. they are really feeling that impact of the trade from canada into the u.s. rio tinto, we heard from them earlier this week. they had production numbers out. is receiving tinto for its aluminum is higher this half than it was in the same period of the year earlier. to be doings seems particularly well because it had a lot of premium products. in terms of china, trade data out last week showed the first half of the year china exported more aluminum than it ever had. we are not seeing a curving of exports from china. shakeout iswider that it is something we still have to look at and monitor. it is not clear-cut what the impact will be yet. ramy: we have new production
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numbers. energy producers coming out with numbers. what are the main takeaways? dave: that is right. a flood of data this morning. it producesun off, all manner of commodities. one of the key highlights, they reported a 44% drops -- drop. that is largely the result of a mine outage it had in australia earlier in the year. for investors they will be warmed by the fact those problems seem to be behind it. production ramping up in a particular operation. we have heard from a couple gold and copper producers. are guiding to higher costs and lower production for the year. a big copper producer in australia, they say they are on track.
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their operations are on course to meet their guidance on full-year production. ramy: we have been talking about how demand for copper is expected to continue looking ahead. thank you. let's head back to wall street. in the u.s.banks appeared to shrug off market uncertainty with morgan stanley leading the way. here now with of the scorecard for the earnings season so far is laura keller. what stood out with morgan stanley? >> morgan stanley is a big investment banks on wall street. that is where they did their beat this quarter. they were up 20%, which is quite large. larger than other investment banks recover. -- underwriting fees, ecm, really drove it. bank morgan stanley helped bring ipo to market for.
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that helped morgan stanley and goldman sachs. ramy: let's expand this to the whole, entire earnings session. when we look at this next quarter, what will we remember? laura: goldman sachs have a new ceo. that is something that happened away from earnings, but david follmann will be the new ceo coming in. lloyd blankfein will be departing the day before, september 30. in terms of earnings, what the second quarter told us, the picture that emerged is that the universal banking model is here to stay. most of these banks, with the exception of wells fargo, having trouble keeping the asset cap down, they were the only bank that showed less loans compared to prior quarters. that was a strong point, having
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forward forsurged the commercial borrowers and consumer. as thesering executives had telegraphed a month ago. up in trade tensions come conversation. i am sure they are asked about it. laura: yes, it did. is this going to affect the banks? will it be positive or negative? what we heard from a lot of executives is that it is not affecting them yet. we spoke to jamie dimon. he spoke to reporters. he said it is affecting psyche more than economics. there are unpredictable outcomes when you start skirmishes like this with major companies -- countries. it is a worry, and it hopefully gets resolved. you also heard across wall street from others.
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when you have citigroup, the ceo saying, it introduced volatility for us, but we have not started to see significant changes in behavior. reflecting it is not something she sees causing strategic actions to change for companies. we did hear from morgan stanley's cfo briefly say some more may be promulgated quickly because of trade talks and where they may go. haidi: laura, thank you for that. great uncertainty abounds. laura keller with a wrapup of our morgan stanley earnings and the financial sector. we will get more on trade in a as president trump continues to threaten more tariffs, what lawmakers can do to calm the situation.
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this is bloomberg. ♪
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haidi: this is daybreak asia. i am haidi stroud-watts in sydney. ramy: i am ramy inocencio in new york. the trump administration investigating whether uranium imports threaten national security. we have seen alcoa blaming tariffs for their lower profit outlook. is suzan delbene, a member of the house ways and means committee. congresswoman, thank you for joining us. has been a lot of handwringing on both sides of the aisle, from democrats as well as republicans, on what this white house is doing in terms of these tariffs. what is realistic in terms of what congress can do to try to
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make or encourage the trump administration to change course? suzan: i think we have to be very clear we are bringing the voices of people throughout the districts we represent. -- represent the congress and hopefully the administration, so they understand the impact trade decisions and terror decisions have on our community is. i represent washington state, the most trade-dependent state in the whole country. tariffs, the uncertainty they have caused around trade in aneral -- tariffs have had direct impact on our agricultural products have caused our terry firm is deceived tariffs go up from 10% rmers% -- our cherry fa tariffs to go up from 10% to 50%. it is impacting families and workers here at home.
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ramy: it is interesting to hear the pain on the ground. the sentiment is there, but we say the damage is not fell just yet. i know one of your deep dives is also technology. there is a concern about jobs and job losses there. tell me about that. suzan: in all sectors, when we look at the impact tariffs have. with trade uncertainty we see folks might want to go to other markets to find goods where things might be more predictable, especially when they look for long-term relationships. that uncertainty impacts our local businesses, their ability to sell. we have also heard from large businesses that can move production. they might move production to other markets where they can produce locally and not see a tariff impact. that will impact workers here at home.
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why i introduced legislation to make sure we continue to provide assistance we do today. we provide trade adjustment assistance, that we provide that to workers that might be andlaced because of tariffs the inability of local companies to export products because of tariff barriers. there seems to be bipartisan agreement within china -- congress that china has historically been engaging in unfair and unsportsmanlike trade practices. if tariffs are not the answer, is there any consensus or possibility of consensus, as to what the desired outcome and strategy should be? suzan: i think we should understand the issues we face. we were talking of aluminum earlier. i have an aluminum smelter in my district. we have a problem of overproduction from china.
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this should be a multilateral approach. we should be working with others instead of putting tariffs up on even our allies, to the point where we are not addressing the problem. we have created new problems. we needed -- need to be working with folks to address the problems we see. there is no claire plan from this administration on what the end game is an -- there is no clear plan from this administration on what the end game is. russianhe noise over election meddling has reached a fever pitch with all the confusion from the white house over the president's stance. on theh does this weigh elections and the elections and do you think sanctions should be put on russia? suzan: we have a president who democracy,rmined our
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undermined our law-enforcement agencies, in his comments in helsinki. we clearly have a serious situation. the director of national intelligence, dan coats, has said the warning lights are flashing. that means we have to be responsible in terms of protecting the integrity of our elections, making sure we have strong resources put in, cybersecurity. the president has not take knowledge that is a concern -- has not acknowledged that is a concern or priority. we need to put resources in place to make sure we are doing everything we can to protect our security and the integrity of our elections. this the responsible of president that he is not making this a priority as well. congresswoman, just want to interrupt with breaking lines from japan. trade numbers just coming through. we are looking at imports
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rising. let me bring this up for you. in terms of a slight miss. the trade balance coming in at 721.4 billion yen. this is for the june month. 6.7%.s, a lower than the 7% growth we were expecting. certainly a slow down from 8.1%. imports coming in from 2.5%. 3% we were expecting. ramy, seeing healthy trade volumes between japan and the e.u. and japan and china. with that the u.s. slowing down to zero growth. ramy: let's also get back to the congresswoman here. in terms of your state, washington, bordering canada, i can not pull in the idea of what is happening with nafta.
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donald trump saying he is looking to mexico for a bilateral trade agreement. what are your thoughts in terms of going separate pathways between canada and mexico and whether that is just posturing? suzan: it is definitely disappointing we have not been able to move forward on nafta, that the administration has not articulated a plan, except for this idea of two separate agreements. clearly the mexican elections have delayed things. it makes it less clear when we move forward with mexico and how. we need to have a plan. administration is to articulate a plan of what their goals are in terms of a new nafta and how we are going to get there. i think it is important this administration engage members of congress because we will have to vote on this. right now we are waiting to hear
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what the next step will be. ramy: in terms of engagement with congress, do you think there are enough members in s, who areyour peer voicing what they are feeling? especially across the aisle. only now are we seeing members of the republican party voicing their opinions on russia out of helsinki. think it is incredibly important members of congress voice their opinion and that the administration engage with members of congress, that we have an open dialogue. have openke to hearings and engage more of the public in this conversation. we have an important trade relationship with canada and weico, but it is important have a trade agreement that works for american families. we need to make sure that works across the country. having a dialogue with members of congress, having an ongoing
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hearing, and understanding what the end goal will be will be important. members of congress will have to vote on an agreement. it is important that communication is happening through this process. haidi: as we head into the midterms, what are your expectations in terms of a result? i am also wondering what your constituents are bringing up as key issues for them? suzan: definitely economic issues are very key. in my state, where trade is important, we hear about trade, especially from our farmers. there are great concerns about health care. republicans have been really sabotaging the affordable care act. as a result, increasing premiums for many folks across the country. making sure we have affordable health care for everyone in this country, coverage for pre-existing conditions, which
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now is in question because of republican action or the and willingness of this administration to defend the affordable care act, that is a big concern for many families. these are top issues, but it really comes down to, what are we doing to make sure we have a strong future for middle-class families throughout our country? that means security economically, but making sure we have a bright future for our children. education, training, these are all issues that need to be highlighted. i think democrats are focused on these issues. i am very concerned about republican policy and the direction they are taking our country. ramy: we have about three and a half months before that midterm. representative susan gobain -- suzan delbene, thank you very much. a look at stories trending across bloomberg, bloomberg
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subscribers are all over the accusedut maria butina, of establishing back channels with politicians. she has alleged ties to russian intelligence and russian oligarchs. automaker hyundai's digital showroom on, advancing online vehicle shopping. on twitter, tictoc has a video on how tokyo intends to handle its super crowded trade problem. they're calling the project -- check out those stories trending on bloomberg online or on the terminal. haidi: we are counting down to the market open in japan, south korea and sydney. closest to that open we are looking at a modestly higher lead when it comes to asia and markets. we had those gains from wall street, nominal -- dominated by financials. morgan stanley the key factor.
7:58 pm the energy tokyo futures, nikkei up by 0.3%. the kospi higher as well. ♪ two, down and back up.
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haidi: it is 10:00 a.m. in sydney. i am haidi stroud-watts. top stories. industrials pushed higher, and the dollar holds. falls to a one-year low, and the pboc may be comfortable with the lower level. and from bloomberg headquarters in new york, i am ramy inocencio. on capitolessage hill. slapped with a record fine in europe. itis order to change the way
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uses services on android devices. well, even when we have no developments when it comes to trade, it is never far from the conversation. market sentiment there, looking at the june trade nubbers from japan, you are perhaps starting to see the impact, if not when it comes to actual volumes, but certainly sentiment with trading partners between the u.s., and we spoke about in the last hour, the rest of the trading world. ramy: and the fear is what is pervading the markets, not so much the damage so far. we had the congresswoman from washington we were talking to earlier, talking about the cheery industry with regards to industry with regards to china. it was definitely about
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earnings, morgan stanley beating estimates and generally, in terms of financials, they had a pretty good second quarter. we expected to maybe start seeing a shift back into fundamentals and volatility, things coming back down, the calm before the storm. in the meantime, in the absence of negative headlines, we are seeing markets trading in this new-normal environment. let's take a look. we are seeing much of these asns in asia, given, ramy, you said, that blow it earnings report pushing earnings on wall street. -- that blowout earnings report, wall street up. report: the nikkei 225 extending gains for a fifth straight day. the yen, that is up a touch after the latest trade figures that we got. they came in higher than forecasts, rising for a 19th straight month, but experts came
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in slower, 6.7% on a yearly japan dealings is with the repercussions of tariffs and the potential levies s, which could cut earnings of automakers by as much as 34%, according to "bloomberg intelligence." and more weakness is seen ahead, given the liquidity conditions 0nd getting closer to the 67 handle. and this is ahead of the jobs report, expecting to see 16,500 jobs added in june. to watchinly want today, figures out from several companies, including the coal to aluminum miner, and those are ones to watch also, given the tariff threats in that space. , down are seeing alumina
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nearly 4%. the backdrop is being offset by , a likes off of nationals gain of about 2/10 of 1% this morning, ramy. ramy: ok, sophie, thank you. rallied, that, of course, on date two of the testimony on capitol hill. let's bring in our strategist who joins us from singapore. so mr. powell said he is slightly more worried about slowing inflation. to what degree does this mean the fed may slow the pace of its rate hikes? hi, good morning. slight warning about a bit more worry on inflation, i think mr. powell is giving himself flexibility, giving himself room to slow down the pace of the rate hikes if things the economy slowed down a bit, and the day before, he said they were going to continue with
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gradual hikes for now, so, again, he is adding caveats, and the bond market is also signaling slowing inflation expectations. do we have the chart of the five-year yields? i was looking at this chart, suggesting what the bond market believes will happen to inflation over the next five years, and that is falling, and much of that decline is due to the decline in oil and other commodity prices. but, you know, nevertheless, we also have the bond market sending a warning on inflation. when i say a warning on inflation, what i mean is a warning that inflation will not stay up at the level of these wants,nts, -- the fed yes, so room to slow down if the economy slows down. if the fed is worried about inflation staying at its target, will this lead to the flattening of the yield curve?
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do want to pop in on the bloomberg terminal, because we can see that the yield curve for 26.29, still0's, at its narrowest since 2007. : yes, yes, i think this would just hasten the flattening of the yield curve. long-term results are sensitive , and inflation expectations are falling, ,ong-term yields will fall along with the short-term yield. i think the message of the bond market is that the economy is doing fine at the moment. the economy is doing perfectly fine, strong enough for the fed to raise interest rates, but looking out into the future, again, this thing about inflation or to express the same idea a little bit differently, the flattening of the yield curve, there are warnings about what may happen in the future, and that is why we have more economists and even a couple of said officials warning of a
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possible flattening or even in version of the yield curve. we have one economist that comes to mind who says we may be in a recession by late 2019. haidi: wes, we are continuing to watch the yuan. do we see more weakness ahead? persons more than one out there that is still saying, look, the evaluation by any other name, at the very least, you can say they are comfortable with it, if not encouraging it. yes, precisely. we did an interview with go, and , andvoiced -- with pimco they voice something similar, saying the pboc has shown a willingness to show more weakness in the you want, to let the currency act as sort of a shock and server -- in the yuan, to let the currency act as sort of a shock absorber. case, that is more
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important than ever now because of president trump's trade tariffs, so in that sense, it can be sort of a shock absorber. i think the pboc would not like to see a disorderly selloff in in yuan and possibly come and do a moving operation. they have shown a willingness for more volatility and more weakness in the currency. haidi: wes, always good to have you, wes goodman. let's get you to first word news with jenna. enna: president trump threatening to impose tariffs on cars imported from the eu, and the president says imported vehicles will be top of the agenda. losses on warn of job both sides of the atlantic as the administration carries out its threat. president trump: we said if we do not negotiate something fair,
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we have tremendous retribution, which we do not want to use, but we have tremendous powers. we have to, including cars. , and youhe big one know what we are talking about with respect to cars and tariffs and cars. google says it will appeal a record $5 billion antitrust fine imposed by the european union for the way it puts search and web browser apps on its mobile devices. it said it changed the way it operates and was given unto mid-october to stop what brussels called "illegal that includesd for those who push services in front of users. >> having used google as a vehicle for its search engine. these practices, they have denied others to innovate and to compete on the merits. denied european
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consumers the benefit of effective competition in a very important mobile field. u.k. prime minister theresa may said no deal is better than a dad. when it comes xit -- no deal it better than a bad deal. and forth johnson said that he quit due to the dithering over brexit. and leaving the hospital to go oys having beenb checked for physical or psychological damage. they were trapped in a cave on june 23, and they were found 10 days later and eventually brought out to safety. the 12 boys and their coach have been declared generally healthy. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2,700 journalists and analysts in over 120 countries.
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this is bloomberg. ramy? low, nearly at a one year the canadian herbal -- canadian imperial bank and other asian currencies. up next, signs of hope for emerging markets. the escalating trade tensions. this is bloomberg. ♪
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is "daybreak: asia." i am haidi stroud-watts. ramy: and i ramy inocencio. amconcerns are growing about the toll of the higher borrowing costs on the local economy in
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indonesia. our policy editor is here. so time for a pause, apparently, after the aggressive rate hikes? they had rapid successive hikes, in less than two months, and yet, the currency has continued to weaken. there is a terrific story on bloomberg. currency or coconuts. in other words, a continues to weaken, and there are concerns about what these higher rate will do, and now they are seeing keeping the rate at 5.25%. let's jump into the bloomberg, on bloomberg library, one of g tv ones.e of our there are broadly some stabilizing, but it has gotten a bit weaker, and, of course, the governor said on july 11 that the rupiah
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depreciation is under control, signaling he probably does not want to hike again. nevertheless, there is some question about that. and finally, indonesia and businesses are facing a double whammy. their costs are going higher because their currency has weakened it so much, and if you are growing, it will be harder to expand and do the things you want to do to grow your business if bond costs are jumping up like that. haidi: yes, kathleen. rupiah, thate could get darker with the rate hiking as the fed boosts the dollar. that trajectory continues. does this backdrop justify a path in rates? kathleen: looking at the situation, you're not seeing any boosted import prices leading to inflation, generally, just yet, and at that point -- gdp has actually stalled out, haidi. but you have got indonesian cpi year over year at about three point 1%, at the bottom of the target, which is 2.5%, 4.5%.
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and that isrisen, another thing that could be vulnerable. you're importing is going to get more expensive, and when it comes to oil prices, they have gone up for a couple of reasons, obviously, get oil prices have gone. they have come back down a little bit. nothing dire yet. oh, one more thing i want to show you quickly. gdp. let's go back to our bloomberg library. the range is around 5% for a long time. that is a good, healthy growth rate, but the latest quarter did slow a bit, and there is concern about higher rates, higher input costs, if you're doing anything as a business that this is something that could affect the economy, and the indonesian employers association said it is concerned that rate hikes are going to hit manufacturing and consumer spending, two very important parts of the economy, haidi. you, kathleen hays. markets to rally.
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also, a backdrop of fundamentals being strong, all of this outweighing the risks of a trade u.s.ith a potential recession. let's talk about this with the jpmorgan asset management strategist, alexander treves. the picture of what you guys in franklin templeton and goldman sachs, a lot of investment houses, are saying, that now it is time to get back in. compared to u.s. stocks, this is compared to 16 years, 2002, more than $7 trillion worth of emerging-market equities falling to their territory. bearhing is, -- falling to territory. you still have rising u.s. rates and shrinking liquidity and the rising u.s. dollar. does that mean that it is kind of like catching something falling?
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think the well, we big picture story is great, actually. you mentioned rising rates, and that is affirmation of the strong economy rather than something that derails the story in and of itself. we're still seeing good flows into this asset class, and as you said, these are cheap assets, so rather than worrying about what happened in the next week warm-up, if we look at the big sure, it is fantastic, and i think we should look at that. the dollar?about what assumptions are you making about its strength or weakness, as the case may be, and what thet the factors regarding demographics being positive? alexander: well, you are right that the dollar has been through a heck of a lot in the last few months, but we think the trend is still down. what we see now is a lip, a counter, a counter blip. in the meantime, the important thing is to find companies that benefit from
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rising consumption and the value chain, increasing valuable franchises, and not worrying so much about the impact of the dollar. speaking to you're us from shanghai, so what is your assumption, and i guess, your level of enthusiasm about the eight share market. talking about markets trading so rarely havehe u.s., we seen them pay such a premium for the u.s. stocks compared to the shanghai composite. what about domestic stocks in china at the moment? alexander: i am glad you mentioned that, because i think is one ofare index the most exciting stories in the region at the moment. we have had this for well over a decade. a long, long time. the point is with those exchanges, you can get exposure to a range of domestic industries, such as technology
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or health care or consumer names , which are not available to offshore investors in china, and so, we think this is actually really exciting, where it is not but for ourhare regional portfolios, as well. ramy: alexander, of course, we cannot get away from the trade tensions, but what about where you are trying to figure out where to go with strategy? theander: well, ultimately, trade war, the exporters, ultimately to the consumers in the u.s. and will pay more for their product, so in our portfolios, we would redouble our efforts with great franchises, great businesses, irrespective of what is happening on the macro level, and that could be financial names, and it could be the consumer or technology names, which i mentioned already. increasingly strong, robust, and demanding consumer base internally, and we think
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that is something which has been building for generations and will continue for more generations, so that is the sort that we like. currencies,ing to as well. i want to hop to the bloomberg terminal. this is the function for the world currency rancor. i set this to asia. you can see against the strengthening of the dollar, we have the chinese renminbi down year to date. to what degree are any of these opportunities? let's start there. opportunities for currencies. alexander: well, i think what you just pointed to is the weakness in the asian currencies are more a factor of the others, and that has created a headwind that has unnerved investors, you have to pick your stocks, but i think this is throwing off things across a wide variety of assets. ramy: for the renminbi, 6.7,
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6.7. some say it could go as weak as 6.9. what are your expectations of this moving in? alexander: well, we think that over time, the dollar will weaken, and that will affect stocks, but, again, you need to focus on the right parts of the market. you have to focus on the right franchises and the right management teams, and that is why we have such a strong stock resource. otherthat rather than things. in terms of the best growth stories that you would say are around asia, two of the big countries that come to mind, so far, india and indonesia. would you agree with that? looking at their rate hikes that we have talked of or their lack thereof within indonesia? i think that the
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point you brought out, india, which is exactly right. it an economy in transition, the reforms taking place attractive, it is also a market where you can find some fantastic individual franchises. the other thing to bring out about it is in the past, india has been hobbled by an underdeveloped export sector. of course, in the current environment, where there is concern about rising tariffs and in escalating trade rhetoric, the fact that india is not ofiant on the export manufactured goods is really quite positive for the moment, so that is a market that we'd like right now across many of our portfolios. in india, it is about finding the right franchises. i think you have to be specific with what you invest in. alexander, are you constructive on tech? we have seen so far this year?
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alexander: i think there are some great opportunities in technology. what is important is that we find companies where there are really robust franchises with advantage, often serving domestic consumer bases, for example, consumer internet. what we are much less interested technology,itized affected by the escalation of trade rhetoric, but, of course, technology can be expressed more broadly. there are companies in the region which have got huge technology components, and moving through the next generation of servicing customers, that is really exciting. factory automation is very tech intensive, and one beneficiary of rising trade rhetoric, i would say, it would be factory automation, because of more manufacturing moves back to the states, then we think that automation will be a big part of that. alexander, really appreciate it. withwas alex treves
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jpmorgan asset management. they are joining us. , were using the gtv and you can also save those charts for future reference. this is bloomberg. ♪
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ramy: welcome back did a quick check of the latest business flash headlines, and alcoa has lowered its 2018 profit rejection as imports on aluminum has created what they are calling a significant headwind. adjusted earnings of up to $3.2 billion, down from its previous estimate of up to 3.7 billion dollars. the forecast adds to concerns for commodity investors over the potential impact of the tariffs. haidi: offering minority take alders a price to developer of luxury apartments higher -- private, which was a
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premium over last friday's closing price, and they valued the company at $1.83 billion u.s., and trading is set to resume on that stock on thursday. this is bloomberg. ♪ retail.
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which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. 8:00 int is half past singapore, about half an hour away from the open of trading there, and we have some of these gains coming through from asia, of course from wall street overnight, a gloomy day over there in the lion city. you know, it is funny. three. ramy: you are watching "daybreak: asia." let's get to first word news dagenhart. jenna: president trump has said he believes that the threat from moscow is ongoing. he says he
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holds vladimir putin personally responsible for interfering in the 2016 election but would not accuse the russian leader of lying. president trump: i do not want to get into whether or not he is lying. all i can say is i do have confidence in our intelligence agencies as currently constituted. i think dan coats is excellent. i think that gina is excellent. we have excellent people in the agencies, and when they tell me something, it means a lot. president trump's top economic adviser is blaming china for the trade war. says could low -- kudlow they are willing to move forward, but president xi jinping is holding things up. he says there is no intention of following through on earlier agreements. powell has again spoken out, saying an ultimate outcome of lower tariffs would be good for the economy. on his second day of testimony
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in congress, powell said he -- opposed protectionism and would like to not see it offset economic momentum, but he remained up read about the u.s. economy, saying there is no indication -- he remained upbeat about the u.s. economy, saying there is no indication of a recession. and the diver who helped rescue the boys from a cave, elon musk had called him a header file. now, musk said that he had spoken in anger and that the situation did not justify that kind of response. he ended up saying "the fault is mine and mine alone." some people cannot help making money. in a week where he gave away $3 million to charity, he added more billions after berkshire hathaway lifted a cap on stocks, rising the most in eight
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years, lifting his fortune. below 80 billion on tuesday after he announced his latest gift, but clearly, it bounced back. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. haidi? haidi: let's take a look at these. : stocks are mixed with the nikkei 225 rising for a littleay, the kospi changed, but we are looking at a fourth day of losses. the look at currencies, the dollar is on the back, with the dollar rally may be on rallying -- unraveling. the yen is up 1/10 of 1%, finding some momentum after the latest japanese trade data, seeing the trade balance swing
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more than expected. we had experts though coming in at a forecast of 6.7 percent as compared to the estimate for a 7% rise. at some stocks i want to highlight in sydney. in particular, you have one under pressure. this is the australian competition watchdog taking action to reject a sale of a , andess to a consortium they have refuted allegations of the stock being down on the back of that news. and a mineral company is rising, with their 2018 output target confirmed, coming in lower for the second quarter. evolution mining on the back as they project higher costs and lower output for fiscal 2019, and alumina sliding. right out they take a of the earnings of the biggest and aluminumucers, fell as much as 4.2%, and with
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that, let's check in on aluminum prices. the base metal edging higher, but aluminum has been on the back, hitting a mere seven-year high in april, and just checking in, it is continuing to gain on speculation that china is taking steps to bolster things. ramy: sophie, checking the markets as well as the metals, thank you. weekend.ore yen we are just shy by a week, as well as a lower rate from the and, with our hong kong china markets. it looks like policymakers are more and more comfortable with a lower currency, letting it the 6.7 line in the sand, six point74 -- 6.74. should we expect to see more weakness? >> yes.
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things have not really changed. you have the china-u.s. trade war still escalating, and the chinese economy is slowing. gdp is slower, and that is leading some speculation about easing, and, of course, the weaker currency will help, and they are saying we will likely see more depreciation. pbocuestion is whether the may step in to support the yuan again. the last time, the pboc supported the currency, and the question right now is whether they will verbally support again , to signal that the depreciation is enough. this time around, have we seen that sense of panic? there are differently some concerns, but in terms of the massive market panic, we are not ofing that, but the gauges
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diversity are there. aversity are there. bears what they want to, and the situation has changed. investors have already been foreign investments, by onshore bonds and stocks, so we are not actually seeing these massive outflows at this point. haidi: yes, the takeaway lesson, do not that against the boc. our china markets reporter in as we keeptian chen, an eye on the yuan. t.ining us is patrick bennet patrick, there are some saying if this is not an outright evaluation, but they are going long trying very hard as
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as it stays above a certain level. i we seeing more of a strength story playing out, or are there fundamental reasons we are seeing weakness in the currency? more a dollarss story, if we look at where dollars/china has traded over andlast year or two years, dollars/china is rising in the middle of that, so the bulk of it is, the greatest influence has been the strong dollar to date. we do have some slowing of the chinese economy, which has been well telegraphed, well expected, as china continues, but i think it is tempting sometimes to say this is a china story, but we do not believe it is at all. haidi: well, that just brings us to the main question, emerging markets. to, ande it is tied what happens from there. we have seen the company should of rising rates and rising currency, and then with the
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trade tensions that have started, arguably, why the u.s., you see that returned to basis. is there any argument or expectation that the strength in the u.s. dollar will not continue? patrick: welcome at this stage, we heard earlier that we have seen the dollar, off a little bit in the last 24 hours, but, of course, that doesn't make it longer trend. lastly, what we heard night, trade tensions are starting to have an impact on companies and outlooks, so if we see that, what we have seen has been underpinned by very strong growth, and gdp growth will be strong. it is likely to fade. we are talking about synchronous global growth, and some believe that was the case. we are starting to see that now. we are seeing trade numbers out of japan this morning that were pretty good. it looks like now that the u.s. is somewhat marginalizing itself
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, affecting the global economy elsewhere, then certainly we expect the dollar to trend lower and that emerging markets, particularly here in asia, to do well. patrick, just today, we saw the dollar come off just a little bit, not as much as we saw yesterday. the bloomberg terminal, i want to show you what is happening in terms of volatility in asian aspects. this is a three-month implied volatility for asian currencies terminal.v the question is whether we are wasng this, something that temporary before, a possible storm, and what catalyst investors should be wary of looking ahead? is an interesting chart. i have seen the similar myself. we looked at that. but i think what we are seeing is either emerging markets -- america and central europe and other influences going on.
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they have political uncertainty, economic uncertainty, as well. where thatuation divergence could extend for some time. i do not see the volatility in asia in emerging markets with the emerging-market volatility more generally. over a few days, patrick, we have been looking at the yen in terms of its weakness. weakest point in six months, since beginning of this year. towe expect that to continue move ahead as dollar strength continues? just today, of course, we got some export numbers about buying into the yen. patrick: that is right. the export numbers are good, as we were mentioning good. i think the dollar/yen to go sustainably higher, we would have to see the dollar stronger, and that is not what we are forecasting. has been, the yen weaker, but around 113, we start
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weakersome resistance to levels in the yen, and we talked about the dollar tracking a little bit lower than here, and perhaps, under for -- underperform as the dollar weakens. of the questions here that we continue to ask is that things change, and this currency, this trade war that is going on between the u.s. and china, is there something that has not and asked? is there something that we have missed here? --or: we believe the risk of patrick: we believe the risk of inflation is under price. prices, potentially higher cpi, and potentially a faster pace of removal of monetary combination. this is priced in at the market at the moment been we think employment is reachingnd we are these limits, and we are for inflation to be higher. patrick, some surprising
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resilience when it comes to currencies, like the aussie or the kiwi, though the aussie is having trouble staying above that $.74 level. is that kind of intuitive, live in the trade tensions across commodities, as well as any kind of return to risk aversion would likely play pretty badly for these currencies? patrick: i think it has already played badly. what we would say as far as trade tensions are concerned, the currencies have the risk priced into them, and we look at australia and new zealand, certainly those two, economic activity, particularly in australia, is very good. we got employment numbers this morning, expected to be strong, from the rba. 3%, expect growth above unemployment trending lower, so everything is ok. yes, we have that concern in the expect the we do not
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rba to act on that point, so we are buying both the australia and the new zealand dollars, and we think that we expect to see them appreciate. haidi: 27 years without a recession here. dollar/chinating to drive lower? patrick: below six. i was expecting that this year, but i think it will be pushed in 2019 now. the extent of the dollar strength surprised somewhat, but we are sellers of dollar strength against china in all major currencies. patrick, always a pleasure. patrick, with the canadian imperial bank of commerce, a strategist joining us from hong kong. coming up, a record fine in europe. we will take a look at all of those issues, next. ♪
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ramy: welcome back.
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this is "daybreak: asia." in new york.cencio haidi: and i haidi stroud-watts. amthe eu ruled that google had illegally pushed their apps on devices, and more penalties if no changes are made in 90 days. caroline hyde reports from brussels. caroline: very serious, illegal activity. that is what has been leveled. and cousin of that, they are being fined. to that compare that overall cash on hand, they have more than $100 billion that they can pay these i'm with. the fine with. but their overall public relations, they are concerned they will have to change their business model. they have got 90 days to do that.
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in particular, or half the way in which they demand telephone makers and telecom operators to give google exclusivity when it comes to the search activity on your phone and the chrome browser. that would have to change or there would be more fines. is up to google and google alone to assure that it abides by the new ruling from the eu. now, it is up to whether the u.s. regulators respond, as well, but, clearly, this is once again the eu leading the charge when it comes to the dominance that some of the u.s. tech companies have in the region. caroline hyde, bloomberg news, brussels. that was bloomberg up us to be as caroline hyde in brussels. let's get a check of the bloomberg flash headlines. the $12.7 show, billion order from a carrier planes, which 100
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would make it asia's biggest operators. new planes will allow them to expand their work at home and beyond. the deal also includes training and technical assistance in the country. haidi: india is said to be ready to inject money into their banks. sources say the government will spend the equivalent of $2 billion to shore up capital buffers and help the lenders make loan payments. they have had to act because of dad loans and a loss of profits. one banks struggling will get the most cash -- they had to act because of bad loans and a loss of profits. lifetime contract, an agreement with the latest sports footwear called the way of wade 7. details have not been released,
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but it is thought to lead up to tens of millions of dollars. haidi: breaking news forever you are, we have teamed up with toc byr to launch tic twitter, offering live video coverage and updated news reports verified by bloomberg, so if you are on twitter, make sure you do follow tictoc. this is bloomberg. ♪
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haidi: this is "daybreak: asia." i am haidi stroud-watts. in sydney. inocencio inm ramy new york. of thergy group is one largest copper cable manufacturer is that is now turning to electric cars, and the founder and chairman told us his plans to push into this crowded market. far east group has been an industrial leader in both copper cable production and sales in china for two w decades. now, one of the leaders. ev companyhe oldest in the world with a history of 110 years. we built a lithium battery factory, with the factory mainly
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ones that are compatible with tesla cars. we also have investors in lithium mines. reporter: how much are you investing in the battery space? >> in terms of the lithium battery business, we have invested a total of 3 billion yuan in the new sector. it could reach total productivity of a value of up to deftlyion yuan, so we will have enough capacity within the next three years to grow much bigger. -- we definitely will have enough capacity. at the moment, two thirds of our total revenue derived from the copper business. all of the rest come from ev batteries. by the end of 2019, our businesses are expected to
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equally contribute to our revenue. in fact, the profitability of our new is this has already surpassed copper cable by 2020, driving at least two thirds of the total revenue. beenter: you have investing roughly $2 billion in a joint venture. what are your ambitions for that? >> we have a plant in the u.k., withbling the small cars the electric company. the small cars have been on the market and the street. meantime, we are setting up production in this region, as well. annual to have production capacity by 2020 and doubled up but 2021. that to makeand 100,000 units of cars annually by 2025. much of ahow challenge do you think this industrial policy proposes for western companies? >> the growth of the chinese economy and this development of
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chinese companies should not be seen as threats to the rest of the world but great contributions. the chinese economy has the best opportunity and prime time in the next 10 to 30 years. any chinese company that wants to join the rise should be part of the government initiative and the development strategies. that was our far east energy company founder speaking to our own tom mackenzie there. you look at what is coming up in the next few hours right here on rish, what are you watching? rishaad: haidi, we're looking at the biggest ind, the world, just coming to an en d at the air show, and loads of water is taking place, and chinese carriers. one of the stories we have had today is boeing, in light of the
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possible trade conflict and how looking at where the planes are headed, so this is something we will be looking at with him and also this new plane others --places the that replaces the other, and the airbuses, the prospects of that, but cargo is doing badly. another is evolving. we have had a terrible time with these cargo carriers losing money, and airlines have been trying to get out of this business. for them,ty good news some of these manufacturers, to be seeing these new orders for freighters, what was the founder, of the business end. so that, ramy. ramy: all right, rish. and before we headed over to you, let's look at how the markets are trading. it looks like the nikkei 225 is
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up, led by energy and information technology. of course, we have energy with a little bit of a bump this trading session on oil and natural gas. the s&p asx up, and 200 is up by about one third. a look at, taking asian futures, looking flat going into that open there, taiwan, about 4/10 of 1%. and there was a slide in tech overnight in wall street. and then malaysian futures there, 1/10 of 1%, so all with modest gains setting up for the asian session proper. ♪
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♪ harvard,en you are at you have a classmate named bill gates. steve: the guy who introduced me said you should meet. david: you are the 30th employee of microsoft. steve: why? i knew how to wear a tie. david: you are the biggest individual shareholder. steve: i am a loyal dude. i still drive fords. david: do you give tips to your l.a. clippers coach? steve: no, i hear there are owners who do that, and i'm not going to be that guy. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but


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